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Wednesday, October 17, 2018

Huge price hikes by drug companies are immoral

Robert Klitzman
CNN.com
Originally posted September 18, 2018

Several pharmaceutical companies have been jacking up the prices of their drugs in unethical ways. Most recently, Nirmal Mulye, founder and president of Nostrum Pharmaceuticals, defended his decision to more than quadruple the price of nitrofurantoin, used to treat bladder infections, from about $500 to more than $2,300 a bottle. He said it was his "moral requirement to sell the product at the highest price."

Mulye argues that his only moral duty is to benefit his investors. As he said in defending Martin Shkreli, who in 2015 raised the price of an anti-parasite drug, daraprim, 5,000% from $13.50 to $750 per tablet, "When he raised the price of his drug he was within his rights because he had to reward his shareholders."

Mulye is wrong for many reasons. Drug companies deserve reasonable return on their investment in research and development, but some of these companies are abusing the system. The development of countless new drugs depends on taxpayer money and sacrifices that patients in studies make in good faith. Excessive price hikes harm many people, threaten public health and deplete huge amounts of taxpayer money that could be better used in other ways.

The US government pays more than 40% of all Americans' prescription costs, and this amount has been growing faster than inflation. In 2015, over 118 million Americans were on some form of government health insurance, including around 52 million on Medicare and 62 million on Medicaid. And these numbers have been increasing. Today, around 59 million Americans are on Medicare and 75 million on Medicaid.